The Hidden Costs of Full-Time Executive Hires
When mid-market companies budget for an executive hire, they typically focus on base salary. A CFO at $250K seems expensive but manageable. What they don't account for is the true Total Cost of Ownership (TCO).
Beyond that $250K base, you're paying:
- Benefits package: Healthcare, retirement contributions, and perks add 20-30% ($50-75K)
- Payroll taxes: FICA, unemployment, workers comp add 7-10% ($17-25K)
- Recruiting costs: Executive search firms charge 25-33% of first-year salary ($50-75K)
- Onboarding time: 3-6 months before full productivity (opportunity cost: priceless)
- Termination risk: If the hire fails (40%+ do within 18 months), severance and replacement costs compound
As we detailed in The Fractional Revolution, this traditional model is increasingly misaligned with how modern businesses actually need to access talent.
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Start Free Trial & Operations IQThe Sobo Savings: A Side-by-Side Comparison
Let's break down what the same strategic output costs through the Sobo model versus traditional hiring:
| Metric | Sobo Model | Traditional Consultant/Employee |
|---|---|---|
| Annual Cost | $60,000-120,000 | $350,000-450,000 |
| Benefits & Overhead | Included | +25-35% of salary |
| Recruiting Cost | $0 (AI-matched) | $50,000-75,000 |
| Time to Productivity | Day 1 | 3-6 months |
| Termination Risk | None (quarterly scale) | Severance + legal |
| Focus Quality | 100% strategic work | Mixed priorities |
The math is stark: you're paying 70-80% less for the same (often better) strategic output. But the savings go beyond the raw numbers.
The Focus Advantage: 100% Strategic Work
Here's what most people miss about fractional leadership: a fractional CFO spending 15 hours/month often delivers more strategic value than a full-time CFO spending 160 hours/month.
Why? Because full-time executives get pulled into:
- Internal meetings that don't move the needle
- Political navigation and stakeholder management
- Administrative tasks below their pay grade
- "Being available" even when there's no strategic work
A fractional expert, guided by Sobo's AI diagnostic insights, focuses 100% of their time on high-leverage activities. They're not attending your all-hands meeting—they're restructuring your cap table or optimizing your cash conversion cycle.
The Sobo Formula in Action
Every Sobo engagement follows the same proven formula:
- AI Diagnostic Identifies the Friction: Operations IQ pinpoints exactly where executive-level attention will deliver the highest ROI.
- Vetted Fractional Expert Implements the Fix: You're matched with a specialist who has solved this exact problem in your industry.
- ROI Achieved at 1/3 the Cost: No recruiting fees, no benefits overhead, no ramp-up time. Just results.
The result? Access to Big 4 caliber expertise at mid-market prices, with the flexibility to scale up or down as your business evolves.
When Fractional Makes Sense (And When It Doesn't)
Fractional leadership is ideal for companies in the $5-50M revenue range that need C-suite expertise but can't justify (or attract) a $400K+ full-time commitment. It's also perfect for:
- Specific initiatives (M&A preparation, ERP implementation, GTM restructuring)
- Interim coverage during executive transitions
- Building foundational systems before hiring full-time
- Accessing specialized expertise not needed full-time
Take our free Operations IQ assessment to see exactly which fractional roles would deliver the highest ROI for your specific situation.
